1. Provide all consolidating entries required to prepare a full set of consolidated statements for 20X4. 2. Prepare a three-part consolidation worksheet in good form as of December 31, 20X4.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 20X3, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Ship
reported retained earnings of $75,000 on the date of acquisition. The trial balances for Plimsol Company and Shipping Corporation as of December 31, 20X4, follow:
Item
Current Assets
Depreciable Assets (net)
Investment in Shipping Corporation
Other Expenses
Depreciation Expense
Dividends Declared
Current Liabilities.
Long-Term Debt
Common Stock
Retained Earnings
Sales
Dividend Income
Plimsol Company
Debit
Credit
$ 160,000
180,000
125,000
85,000
20,000
30,000
$ 600,000
$ 25,000
75,000
100,000
210,000
175,000
15,000
$ 600,000
Shipping Corporation
Debit
Credit
$ 115,000
135,000
60,000
15,000
15,000
$ 20,000
50,000
50,000
100,000
120,000
$ 340,000 $ 340,000
Required:
1. Provide all consolidating entries required to prepare a full set of consolidated statements for 20X4.
2. Prepare a three-part consolidation worksheet in good form as of December 31, 20X4.
Transcribed Image Text:On January 1, 20X3, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Ship reported retained earnings of $75,000 on the date of acquisition. The trial balances for Plimsol Company and Shipping Corporation as of December 31, 20X4, follow: Item Current Assets Depreciable Assets (net) Investment in Shipping Corporation Other Expenses Depreciation Expense Dividends Declared Current Liabilities. Long-Term Debt Common Stock Retained Earnings Sales Dividend Income Plimsol Company Debit Credit $ 160,000 180,000 125,000 85,000 20,000 30,000 $ 600,000 $ 25,000 75,000 100,000 210,000 175,000 15,000 $ 600,000 Shipping Corporation Debit Credit $ 115,000 135,000 60,000 15,000 15,000 $ 20,000 50,000 50,000 100,000 120,000 $ 340,000 $ 340,000 Required: 1. Provide all consolidating entries required to prepare a full set of consolidated statements for 20X4. 2. Prepare a three-part consolidation worksheet in good form as of December 31, 20X4.
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